Bank of America Sucks!!! Excess Mortgage Payments not Applied to Principal.

[LadyInTheRed]

I am so P.O.'d right now! So, I came here to vent.

I'm paying my adjustable rate mortgage directly to BofA. At the beginning of the year, my interest rate dropped and so did my minimum payment. I decided to continue making the same payment so that I could pay down principal and lessen the shock when interest rates start increasing. My monthly statements clearly state that any excess payment will be applied to principal. I noticed on my most recent statement that they are not applying the extra payment to principal, but holding it as "partial payment balance."

I called the customer service number, input my account number into the touch tone system and was, not surprisingly, transferred to the BK department. I was then told that because I am in BK, the only way to have my excess payments applied to principal is to call every month after I make my payment and make the request so that they can have a "technician" apply the payment to principal. "That's ridiculous" I tell her and point out that it is contrary to what the statement clearly says will happen to excess payments. The customer service agent tells me she agrees with me but says there is nothing she can do about the process. She tells me I have an unapplied balance of $380, would I like that applied to principal. I say, "yes" and she asks me to hold while she calls a technician. When she comes back on the line she tells me no techinicians are available and she'll have to send them an email and I should call back later to make sure the transaction is completed. I tell her that I shouldn't have to call back and I want somebody to call me. She says they can't do that. I ask to talk to a supervisor, she says I can't and that they would just tell me the same thing anyway. She got an earful then before I wished her a nice day and hung up.

So, now I'm paying interest on $380 in principal I thought I paid based on the information on my mortgage statement. This seems to be a great way for BofA to make a lot of money when you think of how many other people must have unapplied payments.

I'm going to email the Office of the President at BoA. I got their email address on another website focused on mortgage modifications. Hopefully, I can get this resolved through them. I first need to check my original mortgage documents and see if they contain provisions about the application of excess payments. I'm hoping I can tell them they are in breach of the terms of the mortgage which did not change as a result of me filing bankruptcy.

I just needed to vent. But, I'm open to any suggestions or to hear of other people who may have encountered the same issue.

[hanginginmd]

So if your mortgage payment dropped doesn't that change your amount of disposable income resulting in that "extra money" going to your 13 instead of to your mortgage? Wondering if you spoke to your attorney about this and what they had to say.

[LadyInTheRed]

So if your mortgage payment dropped doesn't that change your amount of disposable income resulting in that "extra money" going to your 13 instead of to your mortgage? Wondering if you spoke to your attorney about this and what they had to say.

Yes, I asked my attorney that question when I filed. He said I don't have to report the adjustments to the payments, even if they went down. I'm sure this will vary by trustee.

[keepsmiling]

Sounds like the typical bureaucratic bull.......how aggravating
Just want to wish you good luck with the battle.

[woeisme]

I had the same issue with my student loans. My trustee allowed payments on them throughout the CH 13 as part of my expenses, unlike most trustees. But then the bank tells me that since i am in BK I am automatically in "default" status even though I kept making payments on time, and that they weren't going to apply any of the payments but rather put them into a separate "holding" account until the CH 13 is complete, then they'd apply the $ to the balance, meaning that interest is accruing on the entire balance throughout the CH 13, even though payments are being made! So even with making $325/month payments, at the end of my CH 13 I'll have almost 20K ready to be applied to the balance, but with the unpaid interest compounding throughout the 5 years, will have basically paid off nothing and owe them almost the exact same amount as I did when I started my 13! It's sickening, but after months of arguing with them I finally gave up, guess it's just the price I'm paying for discharging my other debts.

[StrawberrySu]

This does suck for you Ladyinthered! I hope you are able to get results! Just to add fuel to the fire of how unfair things seem to be lately:
I am my son's Social Security Disability payee. He gets just enough to live on, and I pay his bills immediately after I get his SSD check. He just got on PIPP Plus with the gas company, for low income energy assistance. I paid his gas bill, then on the following month's statement it said the bill hadn't been paid. I called and was told I paid the bill before the month's bill had been issued (I paid it on the 5th and bill came out on 6th, but it is a set amount every month). So they applied it to the full amount owed, not his monthly bill. I talked to different supervisors, and raised a lot of ruckus. No luck. Had to pay the damn thing myself, or he would always be in arrears.

[BigJohn]

My mortgage lender has one of the worst reputations on the internet.

I pay extra and for some reason the money just plain disappears thru their creative accounting.

In February there lawyer contacted me with a new payment. Apparently all of the 'hassles' we have had were settled. In March I paid over $100.00. $40.00 extra to principle, $40.00 extra to escrow and the rest I did not specify. Their coupon claims if you do not specify it goes to escrow. None of the extra money got posted. They claim it all went into a suspense account. I have asked in writing 4 times for a copy of the suspense account ledger. They refuse.

Now I have given them a preset time to come up with the info I want or I will file a small claims suit against them for money that has disappeared and for other charges they refuse to verify.

[IamOld]

I hate to say it but this just goes to show you who runs everything these days - the banks. The moneylenders.

[lillymarlene]

Lady in Red and BigJohn, it's just horrible the stuff banks can get away with now. Especially the big banks like Chase, and BoA there seem to be so many horror stories about. I hope you win your battles with them.

I know this probably isn't all that important, but on 13datacenter my little mortgage bank listed themselves as a secured creditor 100%, for the full amount I owed at the time of $49K. My payments have always been on time and up to date, and now I owe less, about $48.4K. Does this mean anything that this 13datacenter amount is always going to be listed for $49K?

Then I've also thought about paying extra on the principal of my mortgage if I could. But, then I'm afraid to, that it would seem I have more "disposable" income and cause my trustee payments to go up. Would this be "risky" if I just decided to pay this bank extra?

[LadyInTheRed]

Well, I found my promissory note and it does say that if I make a prepayment I have to inform them in writing that I am doing so. I'm still going to write to the office of the president and try to get them to apply excess payments as the monthly statements clearly say they will be applied. They should be made to honor what is on their statements. It even says "Please specify if you want an additional amount applied to future payments, rather than principal reduction."

I use my bank's bill pay to make the payments and there is no way to add a memo to say the excess is a prepayment that should be applied to principal. So, I may start adding the excess to savings and sending a check for an additional payment every 6 months with a letter instructing them to apply it to principal. It's so absurd that they'd rather pay somebody to open my mail and read that instruction and push some buttons rather than just program the system to automatically do what their statements say they will do. At least it keeps people employed.

I really can't wait for the day in the future when I will be able to refinance this loan and never do business with Bank of America again.

IamOld, I agree that the banks have way too much power. We are so powerless in this kind of situation. Even my intent to never do business with BoA again means nothing to them. There are always more suckers to come along and take my place.

BigJohn, when I saw that "partial payment balance" entry, I remembered your story, but couldn't remember who it was. I do feel fortunate that at least they acknowledge the overpayment. I'm sorry to hear you haven't been able to resolve your issue. It really is criminal. Just think of how much money these banks are making because so many people probably don't even notice their payments aren't being applied. It took me 4 months to notice. I get so used to my bank making the electronic payment that I often don't look at the statements. From now on, I'm going to read all of my statements!

[LadyInTheRed]

Lady in Red and BigJohn, it's just horrible the stuff banks can get away with now. Especially the big banks like Chase, and BoA there seem to be so many horror stories about. I hope you win your battles with them.

I know this probably isn't all that important, but on 13datacenter my little mortgage bank listed themselves as a secured creditor 100%, for the full amount I owed at the time of $49K. My payments have always been on time and up to date, and now I owe less, about $48.4K. Does this mean anything that this 13datacenter amount is always going to be listed for $49K?

Then I've also thought about paying extra on the principal of my mortgage if I could. But, then I'm afraid to, that it would seem I have more "disposable" income and cause my trustee payments to go up. Would this be "risky" if I just decided to pay this bank extra?

13datacenter will always list the $49K as the claim amount. It sounds like you are paying the mortgage, not the trustee. If the trustee was making the payments, the balance remaining might decrease. But, not all trustees keep the datacenter info up to date.

If you haven't had any increase in your income since you filed, making the extra payment shouldn't be a problem. But, first, make sure you have a sufficient cash cushion for any unexpected expenses that come up.

[IamOld]

Right ladyinthered - the banks are "too big to fail" and to control...

Well, I found my promissory note and it does say that if I make a prepayment I have to inform them in writing that I am doing so. I'm still going to write to the office of the president and try to get them to apply excess payments as the monthly statements clearly say they will be applied. They should be made to honor what is on their statements. It even says "Please specify if you want an additional amount applied to future payments, rather than principal reduction."

I use my bank's bill pay to make the payments and there is no way to add a memo to say the excess is a prepayment that should be applied to principal. So, I may start adding the excess to savings and sending a check for an additional payment every 6 months with a letter instructing them to apply it to principal. It's so absurd that they'd rather pay somebody to open my mail and read that instruction and push some buttons rather than just program the system to automatically do what their statements say they will do. At least it keeps people employed.

I really can't wait for the day in the future when I will be able to refinance this loan and never do business with Bank of America again.

IamOld, I agree that the banks have way too much power. We are so powerless in this kind of situation. Even my intent to never do business with BoA again means nothing to them. There are always more suckers to come along and take my place.

BigJohn, when I saw that "partial payment balance" entry, I remembered your story, but couldn't remember who it was. I do feel fortunate that at least they acknowledge the overpayment. I'm sorry to hear you haven't been able to resolve your issue. It really is criminal. Just think of how much money these banks are making because so many people probably don't even notice their payments aren't being applied. It took me 4 months to notice. I get so used to my bank making the electronic payment that I often don't look at the statements. From now on, I'm going to read all of my statements!

[BigJohn]

If you want action from the mortgage company, find from the Corporation Commision for your state who their agent is for your state and send them a certified letter demanding accounting, etc. This is the same person you can file a small claims suit against.

[Pandora]

Ouch - sorry to hear that Lady. If it makes you feel any better...PNC works the same friggin' way and whats worse is after not only calling and talking with their BK dept just as you did - we also included in HUGE RED LETTERS highlighted with blazing yellow highlighter exactly how to apply our extra $ towards our princ. Did they? Nope

Took us 3 months to get it all straight as they did just what your lender did - set it aside in another "escrow" account.....

Sheesh..... and they wonder why people get pissed off and rude on the phone with them!

Hope you get it all fixed.

[shellbell]

Lady. I feel your pain. I just looked at my statement from them and see that my Partial Payment balance is........... $1425.30!!!!!!!!!!!! I never paid any attention to this because my mortgage is being paid within my Chapter 13 plan. In fact, my payment has dropped from $787.55 to $542.00, I have 5 more months in my plan and my attorney suggested to just pay the higher amount because I payment modification thru the Bankruptcy court will just prolong my plan. What is it that you found out? Did you have any luck getting that amount applied to your principal?